On April 26, the head brand good shop in the leisure and snack industry disclosed the 2023 annual financial report and the first quarter financial report in 2024. According to the financial report, in 2023, the net profit of the good shop was 180 million yuan; In the first quarter of 2024, the net profit of Liangpin Store was 62,482,800 yuan, down by 57.98%. The decline in net profit of Liangpin Store was due to the price reduction reform implemented by Liangpin Store in November 2023, which led to a decline in the gross profit margin of goods.
In 2023, Liangpin Store carried out multiple optimization and upgrading of its stores, focusing on multiple scenarios to enhance the interactive and differentiated experience of consumers. In addition, with an insight into the healthy trend of snacks, Liangpin Store upgraded its brand proposition to "natural healthy new snacks" this year, showing its firm determination to create healthy snacks for consumers. Some insiders pointed out that good shops with high performance-to-price ratio and high quality-to-price ratio have found new ideas to solve problems in the highly competitive snack track, laying a solid foundation for future development.
Overall revenue remained stable.
The 2023 annual financial report of Liangpin Store shows that in 2023, Liangpin Store realized operating income of 8.046 billion yuan, down 14.76% year-on-year; The net profit of returning to the mother is 180 million yuan.
In 2023, good shops were under pressure in stages, and the overall revenue scale remained stable. As for the reasons for the decline in revenue, Liangpin Store revealed in the financial report that the company’s online channel operating income declined mainly due to changes in the market and platform. In 2023, the company’s online main business income was 3.167 billion yuan, down 32.58% year-on-year, accounting for 39.83% of the main business income, down 10.58 percentage points year-on-year.
The performance report of the first quarter of 2024 disclosed by Liangpin Store on the same day shows that during the reporting period, Liangpin Store achieved an operating income of 2.451 billion yuan, a year-on-year increase of 2.79%; The net profit of returning to the mother was 62.4828 million yuan, down 57.98% year-on-year. Liangpin Store said in the financial report that the decline in net profit of returning to the mother was mainly due to the company’s price adjustment of some commodities, and the gross profit margin declined. At the same time, the government subsidies in this period were affected by the rhythm, which led to a comprehensive decline in net profit.
In November 2023, Liangpin Store announced that it would carry out the largest price adjustment since its establishment 17 years ago on the basis of ensuring high cost performance and quality-price ratio. The average price of 300 products was reduced by 22%, with the highest drop of 45%. Judging from the specific price reduction range of the products, the price per catty of the products in the good shop is reduced by 23% to 39.9 yuan; The price of each type of comprehensive nut products has dropped in 5 yuan -10 yuan; After the cost optimization of Flandy strawberry, the terminal price also decreased from 84.9 yuan/kg to 49.9 yuan/kg.
The advantage of "high cost performance" after the price reduction of good shops has created new growth points for them. The data shows that while the price reduction was implemented, in 2023, the gross profit margin of nuts, roasted seeds and nuts, dried fruits and candies and cakes in good shops increased by 1.99/1.61/2.18 percentage points respectively.
Zhu Danpeng, a food industry analyst in China, said that from the performance of Liangpin shops in 2023 and the first quarter of 2024, it can be seen that the double-high strategy of high cost performance and high quality and price ratio of Liangpin shops has achieved initial results. "The good shop is a brand with both cost performance and quality price ratio. I am very optimistic about the development of the good shop in 2024." Zhu Danpeng further pointed out.
In-depth layout of offline channels
Under the background of the rapid growth of the leisure snack market, offline stores are still the main position for leisure snack brands to occupy consumers’ minds. According to the data of Euromonitor International in 2023, offline channels account for 82.6% of the circulation share of snack foods, and modern channels such as snack specialty stores and convenience stores continue to occupy the market share of traditional couples’ stores, and the trend of channel upgrading continues; Online channels accounted for about 17.4%, the growth of traditional e-commerce platforms slowed down, and online traffic shifted to high-quality products and content-based e-commerce platforms.
Good shops that have made a fortune through offline channels continue to make in-depth layout of offline channels for offline channels that still have full potential.
According to the data of the 2023 annual financial report, Liangpin Store has about 3,300 stores in 23 provinces/autonomous regions/municipalities directly under the Central Government, achieving multi-level coverage from the core business district to the community stores.
Insight into the diverse needs of consumers for snacks in different scenes, the offline stores of good shops are gradually upgrading to service-oriented stores centered on consumer demand.
The person in charge of the good shop told Consumer Titanium that the company insisted on implementing the price strategy of "reducing prices without degrading quality" in the store business, reducing the price of more than 300 products and trying to change consumers’ perception of the high price of the brand. In addition, Liangpin Store actively explores new category models in store business, tries to sell fresh goods in bulk, introduces high-frequency consumer goods such as coffee and short-term guarantee for specific scenes, and also introduces innovative sketches such as frozen products, sausages and baked sweet potatoes according to seasonal changes, which awakens the fireworks in the store through young marketing, effectively increasing the customer unit price and sales in the current season.
It is worth mentioning that, as the "big brother" of the leisure and snack industry, Liangpin shops are also actively seeking new growth points from offline channels through the exploration of the store model.
At the end of July, 2023, Liangpin Store, the largest store in China-Wuhan Economic Development Zone AEON "Snack Kingdom" store opened. The store covers an area of 1,200 square meters, focusing on children’s snacks, coffee, sugar control, fat control and other sub-scenes, selling more than 3,000 products.
Through the continuous optimization and upgrading of offline channels, in 2023, good shops achieved good results in offline channels. According to the financial report data, in 2023, the direct retail business of good shops achieved sales of 1.893 billion yuan, a year-on-year increase of 21.69%.
Jiang Han, a senior researcher at Pangu think tank, pointed out that the multiple adjustments made by good shops to offline channels reflect their strategic vision of flexibility and all-round development. The younger upgrading of offline stores and the adjustment of scene goods will help attract more young consumers and enhance the shopping experience.
Grasp the trend of health
According to the latest data of China Commercial Industry Research Institute, the market size of leisure snacks in China was 928.6 billion yuan in 2023, and it is estimated that the market size will exceed one trillion yuan in 2024. In terms of consumption, the per capita consumption of leisure snacks in China is only 1/2 of the global average, 1/3 of Japan and 1/5 of the United States, and the market space is broad.
In the view of good shops, the difference of consumers’ preference for snacks is objective. Nowadays, low sugar, low salt, low fat and no additives have become the standards for most family consumers to buy snacks. No matter how consumers’ demand changes, higher requirements for product quality and making consumers eat healthier are always the most basic criteria that leisure snack brands need to follow.
As the first snack food and snack enterprise to put forward the "high-end" strategy, Liangpin Store insists on ensuring the high quality of products and balancing the flavor and health of products when reducing prices on a large scale.
According to the financial report, in terms of lo-mei category, the good shops and industry leaders jointly built a research and development center, and the two sides shared research and development resources and technological advantages, and added new products such as chicken feet and air-dried beef. In the vegetarian food category, the good shop developed the bean skin with chickpeas as the core raw material instead of soybeans, and promoted the high-temperature expansion process to replace the traditional frying process, which met the consumer’s demand for zero trans fatty acids and soy products snacks with reduced oil and fat.
The relevant person in charge of the good shop revealed to Consumer Titanium that on the raw material side, the good shop continuously monitored 27 food raw materials throughout the year to promote the optimization of source layout management. Taking dried mango as an example, good shops support suppliers to build factories overseas, which reduces the loss of fresh fruit in import and transportation.
The data shows that with the product strength brought by high quality and innovation, the annual sales of new products in good shops exceeded 1.2 billion yuan in 2023, among which the sales of single products such as Daximei and Ziyi Cashew exceeded 10 million yuan.
Focusing on "reducing the price without degrading the quality", under the background of insight into the new trend of consumers’ pursuit of natural and healthy snacks, this year, Liangpin Store released a brand-new brand proposition-"Natural and Healthy New Snacks", which marked the brand upgrade to a healthier direction.
The relevant person in charge of Liangpin Store told Consumption Titanium that in 2024, Liangpin Store took the lead in proposing and advocating "five reductions" in healthy snacks (namely, "reducing salt, sugar, fat, oil and food additives"), focusing on the two research and development directions of natural healthy ingredients and reducing additives in the production process, so as to make the snack formula simpler, lower the burden and healthier, and continue to provide consumers with delicious and healthy food. This year, Liangpin Store plans to launch more than 140 upgraded healthy snacks, covering core categories such as cakes and biscuits, vegetarian food, dried fruits and preserved fruits.